Transcription of Finance News Network Interview with Senex Energy Limited (ASX:SXY) Managing Director, Ian DaviesLelde Smits: Senex Energy Limited
(ASX:SXY) is a diversified Australian producer and explorer. The Company holds a significant acreage position in the Cooper Basin, where it continues to grow its oil reserves and production. I’m Lelde Smits and joining me at ASX Investor Series in Sydney is the Company’s Managing Director, Ian Davies. Ian welcome.
Ian Davies: Thank you.
Lelde Smits: Senex Energy posted record production, sales revenue and reserves growth over the 2014 financial year. What were the drivers behind the growth?
Ian Davies: Our FY14 results were excellent on the back of our Cooper Basin oil business. In terms of production, 1.4 million barrels net to Senex for FY14, up 10 per cent on the prior year. Strong revenue growth on the back of US dollar Brent oil prices and strong reserves growth. Record reserves growth on the back of our 30 well exploration program that went really well.
Lelde Smits: You’re targeting unconventional gas exploration in the Cooper Basin. Could you outline your strategy and also exploration highlights?
Ian Davies: During the year we announced an exciting joint venture with Origin Energy
(ASX:ORG), to spend up to $252 million in exploring our unconventional gas acreage in South Australia’s Cooper Basin. Origin Energy is going to free-carry Senex for $185 million of that over the next four years or so, which is really exciting for Senex shareholders.
The joint venture is making excellent progress towards the 3D seismic programs which we’re planning. And also the location and specifications of the wells we’re planning on drilling by Q2 next year. In addition to that we’re really excited about the unconventional gas potential, because the market on the east coast of Australia with the LNG project is now so large.
Lelde Smits: Senex Energy holds coal seam gas assets in the Surat Basin. Could you outline your strategy to maximise value from these assets?
Ian Davies: In September, we announced an assets swap with BG Group PLC (LON:BG) and their joint venture partners to give us a wholly owned, so 100 per cent owned, material asset in the Surat Basin in Queensland. Now that asset has almost 500 petajoules or 83 million barrels of oil equivalent of gas in 2P reserves, next to infrastructure in the Surat Basin. As a result that gives us a material project which we can build on. We’ll appraise, we’ll bring pilot production online as soon as possible and really get this gas going.
Lelde Smits: We often hear about the looming gas shortage in domestic and export markets. Could you outline Senex’s strategy to capitalise from this environment?
Ian Davies: So the CSG to LNG projects, which are being built in Gladstone are really providing the impetus on the demand side. As a result, supply is struggling to keep up which gives rising prices and provides a market opportunity, for companies like Senex to fill that gap. We’re doing that by building a gas portfolio across all of our assets, not only in the Surat Basin as I outlined earlier, but also in the Cooper Basin in unconventional and tight gas.
Lelde Smits: Finally Ian. What are Senex’s immediate priorities and how are you aiming to position Senex over the longer term?
Ian Davies: So we just outlined a full year growth acceleration strategy, which will see us doubling reserves and production over the next four years to FY18. What that means in the immediate term is continued growth in production, continued growth in reserves in FY15, as well as continuing to grow all of our growth projects over that time period.
Lelde Smits: Thank you so much Ian Davies for the update from Senex Energy.
Ian Davies: Thank you.
Ends
